Cases of interest: March 2026

Harte v Midwifery Employee Representation and Advisory Service Inc [2026] NZEmpC 58

Employment Court – Breach of good faith – Damages – Penalties

At issue was whether the union had breached the duty of good faith toward the union member and if so:

• What remedies were available to the union member to compensate them for these breaches.
• Whether the Employment Court (the Court) should award penalties against the union.

The union member’s colleague (the complainant) raised concerns about the union member with a union official. The union official wrote to the employer detailing the allegations against the union member. This letter stated that it was written on behalf of union members despite there being no other complainant. The union official did not verify the information or raise the concerns with the union member.

The same union official previously provided support to the union member. The union did not tell the union member that the same union official who supported her, also supported the complainant, which was a conflict of interest and contrary to the union’s own policy.

The employer commenced an investigation into the union member; the investigator requested further specifics regarding any unidentified complainants. The union official made statements to the investigator that were critical of the union member but was unable to provide further specific details. The investigation was ultimately abandoned.

The Employment Relations Authority (the Authority) determined that the union had breached the duty of good faith to the union member. The Authority declined to impose a penalty but issued recommendations to the union. (See: Harte v Midwife Employee Representation and Advisory Service Inc [2024] NZERA 65(external link).)

The union member challenged the Authority’s determination in the Court. In a preliminary decision, the Court found that a union member cannot claim compensatory remedies against a union by way of personal grievance or breach of contract for a breach of the duty of good faith. The Court found that where a union has breached the duty of good faith towards a member, the Authority or the Court may exercise its equity and good conscience discretion under section 189(1)(external link) of the Employment Relations Act 2000 (the Act) to award compensatory damages. (See: Harte v Midwife Employee Representation and Advisory Service Inc [2025] NZEmpC 5(external link).)

The union member claimed that the union had breached the duty of good faith when it:

• misled and deceived the union member in the context of the issues arising from the complaints made by the other employee
• made false statements about the union member which they claimed injured their reputation in the eyes of their employer and colleagues.

The union:

• in relation to the first claim, accepted that it breached the duty of good faith and conceded that compensatory damages of $50,000 should be awarded 
• in relation to the second claim, accepted that it should have done more to verify information and that its actions caused damage and distress to the union member. It denied that any further damages should be ordered against it due to its acceptance that damages should be awarded for the first breach.

The Court found that union breached the duty of good faith when it sent the letter to the employer and in subsequent oral communications about the union member to the employer (see paragraph 46).

The Court awarded a penalty of $12,000 (see paragraph 74). The Court concluded that a penalty was appropriate considering (see paragraph 58):

• the nature and extent of the union’s breaches
• the need to mark out the union’s conduct
• a declaration of breach would not be an adequate response.

The Court awarded compensatory damages of $38,000 (see paragraph 83). In doing so, the Court considered:

• The approach to damages could be guided by the approach taken in the assessment of compensation for personal grievances under section 123(1)(c)(i)(external link) of the Act (see paragraph 80).
• A globalised approach was appropriate given the interrelated nature of the breaches (see paragraph 81).
• Where the penalty was to be paid to the union member and not the crown, the benefit to the employee could not be ignored; there was a need to avoid “double dipping” while also taking an approach consistent with the Court’s equity and good conscience (see paragraph 82).
• As the union had conceded compensation of $50,000, it was fair to deduct the penalty from this amount due to the compensatory element of the penalty (see paragraph 83).

Harte v Midwifery Employee Representation and Advisory Service Inc [2026] NZEmpC 58(external link)

Sheridan v Pact Group [2026] NZEmpC 51

Employment Court – Unjustified dismissal – Medical incapacity

At issue was whether the employer’s decision to dismiss the employee on the grounds of medical incapacity was justifiable.

The employee worked as a community support worker for a charitable trust which provided care services to vulnerable clients. There was an incident at the community home where a client threatened the employee. The police responded to this incident. Both the police and the employee’s colleagues expressed the opinion that the employee should go home. The employee completed the rest of their shift. The employer raised concerns to the employee about their abilities in following appropriate procedures and dealing with clients.

The employee went on sick leave and lodged an ACC claim. The employee was diagnosed with PTSD. The employer expressed to the employee that they may need to terminate the employment on the basis of medical incapacity. ACC requested more information from the employer to process the employee’s claim. The employer requested meetings with the employee. The employee advised the employer that they would not have any information to present until ACC had completed their assessment. The employee’s representative informed the employer that as the claim was for mental injury sustained at work, ACC would take a while to process the claim. The employee’s representative wrote to the employer to advise them that ACC was working on a return-to-work plan and requested that the employer engage with such a plan, however the employer did not do so.

The employer wrote to the employee proposing to dismiss them on the grounds of medical incapacity. The employer recalled the letter the following day as the employee requested all communications be sent to their representative. The employee assumed the letter was recalled pending advice from ACC and did not respond to the letter. The employer dismissed the employee.

The Employment Relations Authority found that the employee’s dismissal was justified and dismissed the employee’s claims.

The employer submitted that it was facing operational pressure due to the impact of the employee’s absence on other staff. It submitted the dismissal was justified due to the need to fill the employee’s position.

The Employment Court (the Court) considered that:

• Expert evidence showed the recovery time for PTSD as being around 18 months (see paragraph 43). The employer applied pressure on the employee within two months of the employee going on sick leave (see paragraph 50).
• The employee suffered incapacity in the course of their employment (see paragraph 52), however the employer failed to follow their own policies and processes set out in their health and safety manual (see paragraph 56).
• The employee did not have a reasonable opportunity to respond to the proposal to terminate the employment before the decision was confirmed (see paragraph 64).
• The employer’s actions undermined its assertion that it was facing operational difficulties (see paragraph 73). The employer could have managed such difficulties in the employee’s absence but chose not to (see paragraph 74).

The Court concluded that the dismissal was unjustified (see paragraph 76). The Court awarded the employee:

• $30,000 in compensation (see paragraph 89)
• six months lost wages with deductions made to reflect any amounts received by ACC during this period (see paragraphs 92, 93).

Sheridan v Pact Group [2026] NZEmpC 51(external link)

The New Zealand College of Midwives Inc v Attorney-General [2026] NZHC 405

High Court – Remuneration of midwives – Breach of settlement agreement

This case involved five causes of action brought on behalf of around 1,500 lead maternity care (LMC) midwives against the Ministry of Health (the Ministry).

At issue was whether:

• The Ministry breached a settlement agreement reached between the parties (the 2018 Settlement Agreement) by:
  • failing to implement a national midwifery contract
  • failing to pay the LMC midwives a fair and reasonable service price
  • failing to provide the midwives the ability to annually renegotiate their fees.
• The Ministry had express or implied obligations to take all necessary steps to fulfil the 2018 Settlement Agreement and to work together in good faith, and if so whether the Ministry had breached these obligations.
• The Ministry made representations regarding the LMC midwives’ pay that the LMC midwives relied on to their detriment, which gave rise to a claim of equitable estoppel.
• The Ministry knew or ought to have known that the LMC midwives were providing services with the expectation of a fair and reasonable service price for those services, which gave rise to an award of restitutionary quantum meruit (reasonable remuneration for services provided; see paragraph 403).
• The Ministry unlawfully discriminated against the LMC midwives on the basis of gender.

The LMC midwives initiated judicial review proceedings against the Ministry in 2015, alleging that the Primary Maternity Services Notice 2007(external link) (the 2007 Notice) breached section 19(external link) of the New Zealand Bill of Rights Act 1990. The 2007 notice set out the terms and conditions for the provision of maternity services. The parties signed a settlement agreement in 2017 (the 2017 Settlement Agreement) and the LMC midwives withdrew the judicial review application. The parties agreed to co-design a new model for funding and contracting LMC midwives. This resulted in the Co-design Project Team making several recommendations relating to the remuneration of LMC midwives. When the 2018 Budget was announced the LMC midwives obtained information which demonstrated that the Ministry did not make a bid for budget in line with the Co-design Project Team’s findings; the Ministry advised the Minister of Health not to accept the findings.

The Ministry acknowledged that it had breached the 2017 Settlement Agreement. The parties attended mediation and signed the 2018 Settlement Agreement. Under the 2018 Settlement Agreement, the Ministry committed, among other things, to implement a national midwifery agreement and pay LMC midwives a fair and reasonable service price by 1 July 2020.

In 2019 the Ministry commissioned independent consultants to establish a fair and reasonable service price for services provided by LMC midwives. The Ministry had not made any bid for budget from 2020 onwards which would meet their obligation to ensure the LMC midwives received fair and reasonable pay. Work on the national midwifery contract was paused. The contract was never implemented but informed elements of the Primary Maternity Services Notice 2021(external link) which replaced the 2007 Notice.

The High Court concluded that:

• The 2018 Settlement Agreement was a binding contract which imposed substantive obligations on the Ministry; the Ministry was in breach of these obligations (see paragraphs 192, 193).
• The Ministry breached its duties to take all necessary steps to work together to fulfil the obligations in the 2018 Settlement Agreement, and to act in good faith, by (see paragraph 261):
  • pausing development of the national midwifery contract in October 2019
  • failing to reach agreed deadlines and repeatedly reassuring the LMC midwives that it was still on track for the July 2020 deadline
  • not clearly communicating with the LMC midwives, particularly about constraints placed on it by internal procurement processes
  • commissioning extra work from the independent consultants relating to the LMC midwives’ pay, without informing the LMC midwives it had done so or of the outcome of that work.
• The LMC midwives did not establish that they relied on the Ministry’s representations to their detriment after 1 July 2020 or that the Ministry represented that any payments would be backdated (see paragraph 400).
• The LMC midwives had not established that they carried out services with the expectation of a fair and reasonable service price for those services from 1 July 2020 (see paragraph 450).
• The LMC midwives were treated differently to general practitioners and obstetricians on the basis of gender (see paragraphs 537, 550). The differential treatment materially disadvantaged the LMC midwives (see paragraph 581) and was not demonstrably justified (see paragraph 601).

The High Court:

• found that fair and reasonable take home pay for an LMC midwife as of July 2020 was $170,340 (see paragraph 787)
• found that, when adjusting pay based on the Labour Cost Index, fair and reasonable take home pay was $200,275.59 in July 2023, and $206,946.03 in July 2024 (see paragraph 788)
• concluded that the two representative LMC midwives were entitled to damages to be calculated by the LMC midwives under a formula proposed by the High Court (see paragraph 819).

The High Court granted the following declarations:

• The Ministry was in breach of the 2018 Settlement Agreement by (see paragraph 826):
  • failing to implement the national midwifery agreement
  • failing to pay LMC midwives a fair and reasonable service price
  • failing to provide LMC midwives the ability to annually renegotiate their fees.
• The Ministry breached its obligations to (see paragraph 827):
  • take all necessary steps to fulfil the terms of the 2018 Settlement Agreement
  • work together in good faith to fulfil their commitments under the 2018 Settlement Agreement.
• The Ministry unlawfully discriminated against the LMC midwifes based on their gender in breach of section 19 of the New Zealand Bill of Rights Act 1990 (see paragraph 828).

The New Zealand College of Midwives Inc v Attorney-General [2026] NZHC 405(external link)

New Zealand Public Service Association Inc v Te Pūkenga Here Tikanga Mahi v Fire and Emergency New Zealand [2026] NZERA 161

Employment Relations Authority – Interpretation – Collective bargaining – Whether consultation document is a proposal

At issue was whether the employer:

• breached the consultation clauses in two collective employment agreements
• breached the duty of good faith
• undermined collective bargaining.

The employer was a party to collective employment agreements with two unions, who were the applicants in these proceedings. Both collective agreements had very similar clauses which required the employer to consult with the unions over any proposal for change that may impact the terms and conditions of the employment for employees covered by the collective agreements. Both unions were engaged in bargaining with the employer.

The employer launched a strategic direction which outlined core areas of focus for the period 2025–2030. The employer released a consultation document which set out proposals for key changes to align each branch with the strategic direction. The proposed changes would impact around 700 workers and result in a net loss of around 140 positions. The employer only provided the unions with the embargoed consultation document 24 hours before it released it to the employees for consultation.

The unions submitted that:

• The material in the consultation document was advanced and almost completed.
• The employer did not consult early enough to satisfy the consultation requirements.
• Communications following the release of the consultation demonstrated that the employer did not use a genuine effort to respond to the views of those being consulted.
• While the employer had invited them to engage with consultation, they were reluctant to do so while proceedings were underway regarding the alleged breaches of the collective agreements by the employer.
• The actions of the employer in how it approached consultation undermined collective bargaining.

The employer submitted that:

• It widely communicated its reasons for change. The unions were aware of its intentions.
• It had to formulate a proposal to trigger the consultation clause.
• There was no proposal that could have been consulted on prior to sending out the consultation document.
• It intended to consult with the unions after it released the consultation document and received feedback from its employees.
• The unions were invited to engage with the proposals but either declined to do so or provided limited responses.
• It met all its consultation obligations under the collective employment agreements as it had consulted with and continued to consult with the unions.

The Authority found that the employer breached the consultation clauses in the collective employment agreements (see paragraph 91). In coming to this conclusion, the Authority found that:

• The employer was obliged to consult not only about the consequences of a proposed change but also on the reasoning behind the proposed change and whether proposed changes should take place at all (see paragraph 66).
• The material that was released went beyond a point where there was any question about whether the proposed changes should occur (see paragraph 69).
• The material presented had passed the point where consultation could be said to be meaningful (see paragraph 77).

The Authority also concluded that:

• The actions of the employer were contrary to the object of the Employment Relations Act 2000(external link) and breached the duty of good faith (see paragraph 101).
• While there had been change to the operating environment, the employer had not undermined bargaining (see paragraph 116).

The Authority reserved compliance orders (see paragraph 106).

New Zealand Public Service Association Inc v Te Pūkenga Here Tikanga Mahi v Fire and Emergency New Zealand [2026] NZERA 161(external link)

Labour Inspector of the Ministry of Business, Innovation and Employment v G & G Bolina Ltd t/a Four Square Tuahara [2026] NZERA 183

Employment Relations Authority – Penalties – Minimum employment standards breaches

At issue was the quantum of penalties to be imposed on the employer for its accepted breaches of:

• section 6(external link) of the Minimum Wage Act 1983 (the MWA)
• section 12A(external link) of the Wages Protection Act 1983 (the WPA)
• sections 23(external link), 28(external link), 40(external link), 50(external link), 56(external link), 60(external link) and 81(external link) of the Holidays Act 2003 (the HA)
• sections 65(external link) and 130(external link) of the Employment Relations Act 2000 (the Act).

At issue was also the quantum of penalties to be imposed on the former director of the employer. The former director remained a shareholder of the employer and was a person involved in the breaches in accordance with section 142W(1)(c)(external link) of the Act.

Two migrant employees (the complainants) submitted complaints to the Labour Inspector. The Labour Inspector investigated the employer and identified issues relating to the complainants and two other employees.

The Authority previously issued a consent determination to record the agreement reached between the parties. (See: Labour Inspector of the Ministry of Business, Innovation and Employment v G & G Bolina Ltd t/a Four Square Tauhara [2025] NZERA 827(external link)). The employer and the former director agreed that:

• They breached the MWA, the WPA, the HA and the Act.
• They owed arrears of $8,833.05 and $19,306.19 to the first and second complainants resulting from their breaches.
• They owed two other employees outstanding annual leave balances of 1.77 weeks and 1.07 weeks.

The Authority considered the statutory requirement to take into account the nature and extent of the breaches, including:

• the impact of each breach on the affected employees (see paragraphs 25–50)
• that there were 23 discrete breaches in total which attracted penalties (see paragraph 51).

The Authority found that:

• When it considered the object of the Act, the breaches undermined the employees’ trust and confidence and breached the employer’s good faith obligations, contrary to the object of the Act (see paragraph 23).
• It was not appropriate to globalise all breaches across the four affected employees; however it was possible to globalise some similar breaches together resulting in a total of 14 breaches (see paragraphs 57, 58, 61).
• The employer took the opportunity to treat migrant workers differently to other workers which demonstrated that the breaches were intentional (see paragraph 65).
• The employees were disadvantaged by being deprived the benefit of the use of their money when they were entitled to it (see paragraph 72).
• The employer and the former director co-operated with the Labour Inspector’s investigation and accepted that they had breached minimum employment standards (see paragraph 75).
• The employees were vulnerable as they were migrants dependent on the employer to keep their visa status (see paragraph 78).
• There was no evidence that the employer or the former director had previously breached minimum employment standards (see paragraph 80).

The Authority also considered:

• the need to “bring home” to the employer and former director that they were required to meet minimum employment standards (see paragraph 81)
• that several factors increased the culpability of the employer and former respondent, including that (see paragraph 82):
  • Four workers were adversely impacted.
  • The complainants lost the use of money they were entitled to for over a year.
  • The Labour Inspector had difficulty in calculating arrears due to record keeping breaches.
• the need for consistency with similar cases (see paragraph 91)
• the lack of information about the employer’s or former director’s ability to pay (see paragraph 92)
• the need for penalties to be just and proportional, balancing the above factors with the need for deterrence (see paragraph 94).

The Authority ordered the employer to pay penalties of $52,800 and the former director to pay penalties of $27,840 (see paragraph 95).

Labour Inspector of the Ministry of Business, Innovation and Employment v G & G Bolina Ltd t/a Four Square Tuahara [2026] NZERA 183(external link)

Wong v NZAT Construction Ltd [2026] NZERA 193

Employment Relations Authority – Employment status of construction worker

Employment Relations Authority – Personal grievance – Unjustified dismissal – Worker with no right to work in New Zealand

At issue was whether the worker:

• was an employee of the named company
• was owed arrears for unpaid wages
• was dismissed by the company, and if so, whether the dismissal was unjustified.

The worker travelled to New Zealand on a visitor visa with the hopes of finding an employer who would sponsor a work visa. The worker began to work for the company. Neither party signed any employment agreement or other contractual documentation. The company did not pay the worker regularly despite their requests to be paid. The worker continued to work without pay as they believed they would eventually be paid. The company told the worker to take a break due to reduced staff. No work eventuated for the worker after this point. The worker requested payment of their wages but was told that the company did not have the ability to pay them.

The worker submitted that:

• In response to repeated requests to be paid, the company made assurances to the worker that they would pay the worker in full.
• It became difficult for them to pay living expenses.
• Despite repeated assurances, the company’s failure to pay the worker led to the worker losing confidence that they would be paid.
• The company’s failure to pay them was a serious breach of the agreement between them and meant that they could no longer continue in the employment.

The company did not participate in the Authority’s investigation except to say that they did not employ staff and that the applicant was not known to them.

The Authority noted that the starting point for whether an employment relationship existed was to examine the mutual rights and obligations set out in any contractual documentation, however in this case the parties had not signed any documents. The Authority then applied the test found in Bryson v Three Foot Six Ltd [2005] NZSC 34(external link). The Authority noted that (see paragraphs 30, 31):

• The worker commenced work on the basis of agreed hours and an agreed hourly rate.
• The worker was given a PIN and an ID card to allow them access to the work site.
• The worker’s hours were regular.
• The worker was not in business on their own account; they worked as directed at the site.
• The worker did not work for any other company while they were engaged by the company.

The Authority concluded that the worker was an employee of the company (see paragraph 32). It noted that neither the employee’s lack of right to work in New Zealand or their failure to pay tax altered this conclusion (see paragraph 33).

As the employer did not participate in the investigation, the Authority accepted the evidence provided by the employee (see paragraph 37). The Authority found that the employer owed the employee:

• arrears of 17 weeks’ wages amounting to $18,187.50 (see paragraphs 38, 39)
• unpaid holiday pay amounting to $1,455 (see paragraph 40).

The Authority found that the employee repeatedly raised their concerns regarding the unpaid wages which were not addressed (see paragraph 44). The Authority found that the employer’s failure to pay wages, along with the employer’s statement that the employee was no longer needed, meant that the employee was unjustifiably constructively dismissed (see paragraph 44).

The Authority:

• found that the employee was not entitled to lost remuneration as they did not have the right to work in New Zealand and did not attempt to mitigate their losses by applying for a visa which would allow them to work in New Zealand (see paragraph 48)
• awarded the employee $8,000 in compensation for injury to feelings (see paragraph 53)
• noted that while the employee’s visa status and non-payment of tax could have been regarded as blameworthy, it did not cause the situation giving rise to the grievance and it appeared that the employer condoned or encouraged these behaviours (see paragraph 56).

Wong v NZAT Construction Ltd [2026] NZERA 193(external link)